The Dutch nation is often lauded for its mercantile spirit. That was true in 1602 when the Amsterdam Stock Exchange was established, the oldest in the world, to handle stocks and bonds issued by the Dutch East-Indies Company (VOC). This was also true in 1978 when the European Option Exchange (EOE) was founded in Amsterdam to trade futures and options, by that time the first derivatives exchange outside of Chicago.
Pierson Options Clearing, one of the legal predecessors of ABN AMRO Clearing, was created in 1982 to support and guarantee the floor traders on the EOE. It was a successful initiative that established a good reputation in the market. A first office out of the Netherlands was opened in London in 1985.
In 1991 the newly formed ABN AMRO Bank was the parent company of both Mees & Hope, a bank with a long-standing custody pedigree, and Pierson, Heldring & Pierson. It was decided to merge both subsidiaries and a new brand was created: MeesPierson. At the Regulators request the clearing business, aiming for Public Order Members (POMs), was to be segregated from the general banking business. In line with this instruction a new entity called “General Derivatives Services BV” was put into place.
Our deep knowledge of asset servicing originates from many years ago. In 1992 MeesPierson Custody Services was established, a commercial initiative to consolidate the existing correspondent banking relationships and local custody services. Strong growth was witnessed and in it did not take long for this new company to become a leading local custodian in the Netherlands. Testimony to the quality of the service were multiple ‘Top Rankings’ awarded by the Global Custodian magazine.
On the back of derivatives exchanges starting to grow strongly and emerging around the world. The international expansion began. Offices were opened in Frankfurt (1993), Hong Kong (1995) and Sydney (1998). Floor Based Markets dominated the industry and personal relationships drove business. Indeed, a number of ABN AMRO Clearing’s best customers today date back to this time, when teams of only a handful of guys in colourful jackets filled the trading floor.
Trading Floors shifted systematically to electronic exchanges. Clients wanted to trade more markets, more products, more equities, more warrants, more ETF's and generally push their position. MeesPierson, at the time part of the Fortis Group, took over the clearing operations of Transmarket, a Proprietary Trading Firm and Futures Commission Merchant in Chicago. This opened the door to start clearing futures for the local subsidiaries of some of our most important clients in Europe and Asia.
The internal market within the EU for Financial Services companies had become much more competitive and a new strategy was required. The clearing business took on a more global dimension and merged with the custody unit. In 2003 Fortis Bank Global Clearing NV was founded as a separate legal entity with a full banking license. This new entity showed unique strengths through the combination of deep asset servicing knowledge and global clearing capacity. To remain competitive we moved beyond the separate office approach and installed increased internal communication and cross-border collaboration. We focused on Principal trading groups and invested in new products and services for these core clients, supporting their growth plans in every region covered.
A new Clearing subsidiary was set up in Singapore to keep track of the expansion of our client base in the Asian region. Double digit growth numbers were posted several years in a row, and staff numbers went up quickly. This new local presence scored impressive progress in the domain of client satisfaction, market share and number of clients.
Fortis Bank Global Clearing completed its access to the US markets by acquiring O’Connor, a Chicago based, well-established and highly respected FCM and broker dealer (2006). It was the start of a second wave of international expansion with the support of the Fortis group.
In the run up to the implementation of MiFID, Fortis Clearing teamed up with some of its major clients and with Chi-X to create a new CCP. The creation of the European Multilateral Clearing Facility (EMCF) in 2007 enabled the newly established Multilateral Trading Facilities (MTFs) to compete on pricing and service for every part of the value chain. This greenfield initiative turned into a huge success for the MTFs and EMCF rapidly became the biggest pan-European clearing house for cash securities.
In order to keep pace with further business expansion in Asia, it was also decided to set up a subsidiary in Tokyo.
The banking crisis hit Fortis Group hard. As a separate bank with its own banking license, Fortis Bank Global Clearing managed to weather the storm thanks to tremendous commitment of management and staff. Clients cautiously monitored developments, but stayed on board: a true testimony of the partnership built over the years. After Fortis Bank Netherlands was taken over by the Dutch government a new and uncertain, independent journey started. Some essential parts of the bank found themselves ‘at the other side of the fence’ (Fortis Clearing Chicago). At the same time we needed to rebuild our access to the financial markets to assure our funding requirements in Asia in the post-Fortis era. For this purpose a new banking branch was created in Singapore and the quest for a banking license began. The full banking license was obtained from the Monetary Authority of Singapore in 2009.
In April 2009 Fortis Bank Netherlands merged with ABN AMRO Bank, which after the take-over and split of the company was fully focused on the Dutch market. Our name changed into ABN AMRO Clearing Bank later that year. With the support of the newly formed bank we managed to recover our Chicago team and clients. It was the start of a new era and with the full support of the Board of the new Bank, ABN AMRO Clearing managed to engage on its growth path again.
The ABN AMRO Clearing office in Tokyo cleared its first transaction in 2009. It took a lot of patience and preparation to obtain all necessary licenses as a clearing firm. Many from our existing customers cleared with 3rd parties at the time. Offering a robust and cost effective solution enabled to rapidly grow our clearing flows. In a very short time ABN AMRO Clearing has won important market shares in the Japanese derivatives and equity market, measured by the number of transactions processed.
The creation of Holland Clearing House (HCH) opened up the possibility for The Order Machine (TOM) to service derivatives retail flow on a ‘best execution’ basis. This successful initiative allowed stakeholders to manage and control both costs and service in every part of the value chain. In a relatively short period of time TOM reached market shares of more than 30% in equity and index option contracts on the Dutch market.
The Brazil market holds a tremendous growth potential and access represents a high priority for our traditional client base. ABN AMRO Clearing had already been active in the market for a few years through a local provider. The complexity of the market did not allow to scale that off-shore business model. A more sustainable solution was put in place when ABN AMRO Bank took over Banco CR2, a local merchant bank that merged with ABN AMRO Brazil. Benefiting from the newly acquired banking license AAC started a project to become a local clearer on BM&F BOVESPA.
ABN AMRO Clearing sells 50% of EMCF to EuroCCP and BATS-Chi-X.
ABN AMRO Clearing sells 75% of HCH to Intercontinental Exchange (ICE).
In January 2015 the first futures trades were cleared by our Brazil operations. In September 2015 we obtained a full clearing license and now also clear options and securities.
Our story goes on and undoubtedly new exciting initiatives will be rolled out going forward. At ABN AMRO Clearing we have a history of worldwide business expansion and dedication to our clients. We are committed to the clearing business and will continue to invest in our services and to improve the support for our clients.